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Archives for February 2020

Origin Verification irregularities (Additives case )

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What if we claim preferential tariff treatment the wrong way in order to reduce customs duties under the FTA?

Customs conduct a verification exercise on the good at random or when they have doubts about the authenticity of the certificate.

Here is an Actual case of OriginVerification of a company imported frozen Surimi (minced fish), claiming preferential tariff treatment as “goods wholly obtained” under one of Japan’s EPAs.

Customs received information from outside sources that in the process of producing the Surimi, phosphates that are not available in country A had been used as a preservative.
Customs asked the importer to provide more information about the Surimi. The importer
provided Customs with the list of ingredients. Customs examined the document and found
that the material concerned (i.e., phosphates) was included in the list. Therefore, Customs
had doubts about the originating status of this material and requested the exporting country
to conduct verification with regard to its originating status, in accordance with the relevant
provision of the EPA.

As a result of the verification, it was discovered that the phosphates used in the production
process were non-originating.

Origin Verification irregularities (Additives case )

Customs determined that the Surimi was not an originating good, and therefore preferential tariff treatment was denied.

The importer made an amendment to the declaration of duty and paid the necessary amount.

Retrieved from:GUIDE TO COUNTER ORIGIN IRREGULARITIES (EXCLUDING FRAUD)

How “Sunshade” is classified under HS code

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In order to reduce supply chain costs, proper HS Tariff Classification needs to be
taken, when it comes to adopting CTC method.

In this article, I’m going to introduce how “Sunshade” is classified by the
customs across the world from each country’s Advanced ruling database.

Those information will be a great help to understand how customs might consider to classify.

German Customs case

Reference:DE22021/14-1
Classified HS code : 6303.12
Issuing date : 2015-01-21

Sunblind,  extendable loud application with a width of 45 cm and 50 cm, – thickness of an approximately 0.3 mm, monochrome warp aloud request 100% nylon (synthetic fibers), – mounted on a retractor base metal, which is located in a rail of base metal, – complained at the bottom with a rod of base metal and secured with Velcro and a suction cup made of plastic, – made up by joining together, – for attachment to a Car wheel with two suction cups made of plastic equipped – no classification as an accessory for cars in the position of 8708, since the product is referred to as indoor blind at the position 6303 in more detail, – with regard to the use of the goods as an inner shade (sun protection), the knitted fabric is essential character.

Therefore it’s classified to “Interior blind of textile materials, knitted fabrics made of synthetic fibers”(HS code 6303.12)

Retrieved from:European Union Website

France Customs case

Reference: FR-PRO-2007-000391-02
Classified HS code : 6303.12
Issuing date : 2008-09-25

Textile product preassembled, as sun visor of rectangular wound occurring in a metal structure, driven by spring. the curtain is made from a fabric of hosiery knitting kept a tight plastic base with a hook. this product is intended to be attached to a motor vehicle rear track. length: 74 cm

It’s classified as “Interior blind of textile materials, knitted fabrics made of synthetic fibers”(HS code 6303.12) because the knitted fabric is considered an essential character.

Retrieved from:European Union Website

 

German Customs case

Reference: DEB/775/08-1
Classified HS code : 8708.29
Issuing date :2008-04-07

Recognizable accessories of bodies for motor vehicles of headings 8701 to 8705, not intended for industrial assembly under customs control, the so-called sun protection in an oblique form. The product (38 x 65 cm) consists of a bent wire spring steel frame that is covered with a black wrinkle-free, perforated polyester knits and skirts. The collapsible to 20 cm in diameter Car sunshade can be attached with suction cups made of plastic on the rear side windows of a car. It is made precisely for the rear side windows of passenger cars and is due to its sloping tapered shape recognizable as accessories for motor vehicles constitutes Goods (2 piece sun protection and 4 suction cups) is packed in a polyethylene bag for retail sale.

Since this item is made precisely for the rear side windows of passenger cars, it belongs to “Parts for motor vehicles”(HScode 8708.29)

Retrieved from:European Union Website

Spain customs Customs case

Reference:ES-2013-000327-0127/13
Classified HS code : 8708.99
Issuing date :2013-05-17

Sunshade with a rectangular shape and dimensions of 110 x 60 cm, consisting of a plastic layer (40%), a layer of cardboard (50%), coated on both sides by aluminum foil and welt around the edge.It is designed to be placed on the windshields of vehicles leading corners rounded, save a cutout for the rear view mirror two velcro straps and three elastic loops. It is used to protect vehicles from the sun.

Since this item can not be classified as textile products, It belongs to “Other parts and accessories for motor vehicles”.(HScode 8708.99)

Conclusion

When it comes to classifying “Sunshade”, Several decisions are made depending on the country and type of “Sunshade”.
With detailed information about the item, a careful investigation should be needed.

How “Bushing” is classified under HS code

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In order to reduce supply chain costs, proper HS Tariff Classification needs to be
taken, when it comes to adopting CTC method.

In this article, I’m going to introduce how “Bushing” is classified by the
customs across the world from each country’s Advanced ruling database.

Those information will be a great help to understand how customs might consider to classify.

German Customs case

Reference:DE16712/14-1
Classified HS code : 8708.80
Issuing date : 2015-04-09

Subframe bushing for a vehicle、so-called metal sleeve Part Number：FOC40004420002M / 0060-070-0010、Photo see Annex、 – consisting of a cylindrical sleeve with a height of 75.7 mm and a diameter of 69.9 mm、 – at one end, with a beveled edge（beveled edge） – at the other end with an outwardly bent edge（collar） – used by the applicant to the subframe bushing of attenuation – Recognizable Part for predominant use in suspension systems of motor vehicles.

Therefore it’s Classified to “Suspension systems and parts thereof” (HScode8708.80)

Retrieved from:European Union Website

Italy Customs case

Reference:ITBTIIT-2017-608M-222100
Classified HS code : 7307.99
Issuing date : 2018-03-12

bushing for a flexible tubes (ferrule). the product is made of carbon steel and is a cylindrical form. the bushing inside his present a necessary profile to create a coupling of form between it, flexible hose and cannotto. the windows present inside are parallel and have a trapezoidal profile. the product, according to the model, differentiates in diameters and lengths.

Retrieved from:European Union Website

This item belongs to “parts of general use” , no particular function to be adopted any apparatus.
Therefore it’s classified to “Steel Tube or pipe fittings”(HScode 7307.99)

German Customs case

Reference:DEHH/863/07-1
Classified HS code : 3926.90
Issuing date :2007-04-12

“Bushing”; Approximately 5 cm large, slightly conical shaped hollow cylinder (bottom diameter: 24 mm, top diameter: 20 mm, wall thickness: 3 mm) from a plastic material as defined in Note 1 to Chapter 39 (polyamide according to information provided by the applicant). Goods threaded serves as a connecting element between a so-called floor mop and a stem.

Retrieved from:European Union Website

This item belongs to “parts of general use”.
Therefore based on its material, it’s classified to “Other articles of plastics”(HScode 3926.92)

Czech Republic Customs case

Reference:CZ14-0027-2006
Classified HS code : 4016.93
Issuing date :2006-02-14

Bushing of vulcanized rubber.  black rubber ring with an inside diameter of 8 mm and an outer diameter of about 15 mm, the perimeter of the U-profile.  Used to protect cables, led through the holes in different materials (eg metal, plastic).

This item belongs to “gaskets, washers and other seals”.
Therefore based on its material, it’s classified to “Rubber products”(HScode 4016.93)

German Customs case

Reference:DE7472/14-1
Classified HS code : 7608.20
Issuing date :2014-06-10

AluminiumrohrBei of the goods is a concentric hollow cylinder with an over the whole length of approximately 360 mm constant circular cross-section with uniform wall thickness（pipe）.
The outer diameter is about 40 mm. According to the information、there is a tube made of various aluminum alloys with aluminum content predominant by weight、manufactured by extrusion.

Retrieved from:European Union Website

Since this item is just a hollow cylinder, it’s classified to “Aluminium tubes and pipes”
even though it’s going to be used as “Bushing” after processing in importing country.

When it comes to classifying a “Bushing”, It is important to consider how this product fits for apparatus.
It seems that just adjusting its shape is not enough to be considered as  “Parts of something”, there might be needed to be shaped directly equipped for apparatus to be considered as “Parts”.
Otherwise, it’s classified depending on its material.

How “Filter” is classified under HS code

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In order to reduce supply chain costs, proper HS Tariff Classification needs to be
taken, when it comes to adopting CTC method.

In this article, I’m going to introduce how “Air filter” is classified by the
customs across the world from each country’s Advanced ruling database.

Those information will be a great help to understand how customs might consider to classify.

Netherlands Customs case

Reference:NLRTD-2006-002851
Classified HS code : 8421.99
Issuing date : 2006-08-30

Filter panel composed of a moisture-proof cardboard box、in which the filter medium is present in concertina form. This filter is used in an air treatment plant for filtering or purifying the air in buildings. The filter medium consists of a folded in a zigzag、nonwovens of polyester fibers.The dimensions of the frame amounts 28.89 cmx59、37cmx4、45cm。

Retrieved from:European Union Website

Classified to “Parts of machinery and apparatus for filtering or purifying water ” because It’s designed to fit apparatus for filtering or purifying water.

German Customs case

Reference:DE20262 / 16-1
Classified HS code : 5911.90
Issuing date : 2017-5-8

Filter cartridge with an outer diameter of 7.6 cm and a height of 9.4 cm、 – of a lamella-like folded filter surface of a nonwoven fabric of spinning materials、A so-called clip made of apparently base metal、 – equipped internally with a so-called supporting fabric made of apparently base metal、 – assembled by assembling、 – is designed according to the application for a pressure oil filter for the filtration of transmission oil in a vehicle


Retrieved from:European Union Website

Even though It’s mainly used for filtration with equipment, it is classified as
“Textile products for technical uses” (HS code 5911.90),
because it’s not fully designed to fit apparatus for filtering or purifying water.

Netherlands Customs case

Reference:NLRTD-2008-000291
Classified HS code : 5911.90
Issuing date : 2008-05-07

an article of textile material for technical uses、a so-called filter、including the following features： – made from non-wovens; – composed of synthetic fibers – a round shape with a diameter of 165 mm、the product is used in demonstrations with a vacuum cleaner.


Retrieved from:European Union Website

Even though It’s mainly used for filtration with equipment, it is classified as
“Textile products for technical uses” (HS code 5911.90),because it’s not fully designed to fit apparatus for filtering or purifying water.

When it comes to classifying a “Filter”, It is important to consider how this product fits for apparatus.
It seems that just adjusting the textile’s shape is not enough to be considered as  “Parts of machinery”, there might be needed to be shaped directly equipped for apparatus.
Otherwise, it’s considered as one of the Textile products.

How “Car floor mats” are classified under HS code

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In order to reduce supply chain costs, proper HS Tariff Classification needs to be taken,
when it comes to adopting CTC method.

In this article, I’m going to introduce how “Car floor mats” are classified by the
customs across the world from each country’s Advanced ruling database.

Those information will be a great help to understand how customs might consider to classify.

German Customs case

Reference:DEBTI15994
Classified HS code : 8708.29
Issuing date : 25/06/2019

in a four-part set with specially cut floor mats： – – one mat each for the driver and front passenger in the dimensions（according to request）71 cm x 44.5 cm as well as two-floor
mats for the back seat row in the dimensions（according to application）45.5 cm x 43.5 cm、 on the top with a non-slip rippled structure、 mainly for use in motor vehicles


Retrieved from:European Union Website

Classified to “Body accessories for motor vehicles” because It’s mainly used for motor vehicles.

UK Customs case

Reference:GB121403236
Classified HS code : 5702.42
Issuing date : 2012-01-06

A 4 PIECE SET OF TEXTILE CAR MATS.THEY HAVE A PILE CONSTRUCTION,WITH A TPE
NODULED BACKING AND ARE MADE FROM POLYPROPYLENE WOVEN MATERIAL WITH
A SURGED BINDING AROUND THE EDGES.PUT UP FOR RETAIL SALE ON A PLASTIC
HANGER WITH A CARD DESCRIPTION ON THE UPPER PART。


Retrieved from:European Union Website

Even though It’s mainly used for motor vehicles, classified as “CARPETS” (HS code 5702),
because it’s surface is made of Woven, floor covering of pile construction.

This condition fulfill the terms of textile material products, therefore it can not be
classified as “Body accessories for motor vehicles”

German Customs case

Reference:DEBTI8586 / 19-1
Classified HS code : 8708.29
Issuing date : 14/06/2019

Floor mats、so-called chrome-look rubber mats.- two-piece set with two specially cut、identifiable exclusively for use in passenger cars floor mats、 – according to the
application of plastic（polyvinyl chloride -PVC-）. – with the dimensions approx
700 mm x approx。455 mm – with black studded back and silver-colored front with
corrugated structure（so-called chrome-look design / aluminum-look coating）
– for the driver’s side and the passenger side、 – on a cardboard marker
（Hanger with rider ）for retail sale.


Retrieved from:European Union Website

Classified to “Body accessories for motor vehicles” because It’s mainly used for motor vehicles.
The surface material is made of polyvinyl chloride, therefore it can not be classified as carpet.

Import fees from Japan to US

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Since “Unites States-Japan Trade Agreement” was reached, Import fees from
Japan to the US can be reduced adopting “Preferential Duty rate”

This article explains the way to calculate Import fees from Japan to the US from
official document.

Import fees from Japan to US

Basic import fees from Japan can be found from Harmonized Tariff Schedule,
and “Preferential Duty rate” from Japan products can be found from
U.S.-Japan Trade Agreement Text.

In order to find the “Preferential Duty rate” from Japan, there are several steps
to be taken.

1. Specify the “HTS code” of the product.

If the “HTS code” has not been specified, find it from Harmonized Tariff Schedule

2. Check the “Base Rate” and “Staging Category”

“Base Rate” and “Staging Category” can be found from Agreement Text
Tariff Schedule of the US .
“Base Rate” is normal Duty rate adopting every item, and “Staging Category” is
specifications of the “Preferential Duty rate” given in terms of the year from
the Agreement started.

Some items Duty rate is eliminated entirely on the date of entry into force of the
Agreement,and some items Duty rate is eliminated in annual stages, therefore
“Staging Category” varies from “A” to “K” to specify the schedule to be eliminated.

3.Check the “Eliminating schedule of the Duty”

Staging Category’s definition can be found from ANNEX II

(a) customs duties on originating goods provided for in the items in staging category
A shall be eliminated entirely, and these originating goods shall be duty-free on the
date of entry into force of this Agreement;

(b) customs duties on originating goods provided for in the items in staging category
B shall be reduced by three percentage points on the date of entry into force of this
Agreement, and these originating goods shall be duty-free in year two;

(c) customs duties on originating goods provided for in the items in staging category
C shall be eliminated in two equal annual stages, and these originating goods shall
be duty-free in year two;

(d) customs duties on originating goods provided for in the items in staging category
D shall be eliminated in five equal annual stages, and these originating goods shall
be duty-free in year five;

(e) customs duties on originating goods provided for in the items in staging category
E shall be eliminated in ten equal annual stages, and these originating goods shall be
duty-free in year ten;

(f) customs duties on originating goods provided for in the items in staging category
F shall be reduced to 50 percent of the base rate on the date of entry into force of this
II – 2
Agreement, and duties on these originating goods shall remain at the resulting duty
rates;

(g) customs duties on originating goods provided for in the items in staging category
G shall be reduced by three percentage points on the date of entry into force of this
Agreement, and shall be further reduced to 50 percent of the base rate in year two.
Duties on these originating goods shall remain at the resulting duty rates;

(h) customs duties on originating goods provided for in the items in staging category
H shall be reduced by three percentage points on the date of entry into force of this
Agreement, and shall be further reduced by three percentage points in year two.
Duties on these originating goods shall be reduced to 50 percent of the base rate in
year three, and shall remain at the resulting duty rates;

(i) customs duties on originating goods provided for in the items in staging category
I shall be reduced to 50 percent of the base rate in two equal annual stages, and duties
on these originating goods shall remain at the resulting duty rates;

(j) customs duties on originating goods provided for in the items in staging category
J shall be reduced to 50 percent of the base rate in three equal annual stages, and
duties on these originating goods shall remain at the resulting duty rates; and

(k) customs duties on originating goods provided for in the items in staging category
K shall be reduced to 50 percent of the base rate in five equal annual stages, and
duties on these originating goods shall remain at the resulting duty rates.